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The Formation of Beliefs: Evidence from the Allocation of Land Titles to Squatters

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Author Info
Rafael Di Tella
Sebastian Galiani
Ernesto Schargrodsky

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Abstract

We study the formation of beliefs in a squatter settlement in the outskirts of Buenos Aires exploiting a natural experiment that induced an allocation of property rights that is exogenous to the characteristics of the squatters. There are significant differences in the beliefs that squatters with and without land titles declare to hold. Lucky squatters who end up with legal titles report beliefs closer to those that favor the workings of a free market. Examples include materialist and individualist beliefs (such as the belief that money is important for happiness or the belief that one can be successful without the support of a large group). The effects appear large. The value of a (generated) index of "market" beliefs is 20 percent higher for titled squatters than for untitled squatters, in spite of leading otherwise similar lives. Moreover, the effect is sufficiently large so as to make the beliefs of the squatters with legal titles broadly comparable to those of the general Buenos Aires population, in spite of the large differences in the lives they lead. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/qjec.122.1.209
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Publisher Info
Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 122 (2007)
Issue (Month): 1 (02)
Pages: 209-241
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Handle: RePEc:tpr:qjecon:v:122:y:2007:i:1:p:209-241

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  2. Eric Brunner & Stephen L. Ross & Ebonya Washington, 2008. "Economics and Ideology: Causal Evidence of the Impact of Economic Conditions on Support for Redistribution and Other Ballot Proposals," Working papers 2008-18, University of Connecticut, Department of Economics, revised Aug 2008. [Downloadable!]
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  3. Duranton, Gilles, 2008. "From Cities to Productivity and Growth in Developing Countries," CEPR Discussion Papers 6634, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Giuliano, Paola & Spilimbergo, Antonio, 2009. "Growing Up in a Recession: Beliefs and the Macroeconomy," IZA Discussion Papers 4365, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. Bonnet, CéLine & Dubois, Pierre & Martimort, David & Straub, Stéphane, 2009. "Empirical Evidence on Satisfaction with Privatization in Latin America: Welfare Effects and Beliefs," IDEI Working Papers 566, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
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  9. Jan K. Brueckner & Harris Selod, 2008. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  10. Andreas Kuhn, 2009. "In the eye of the beholder: subjective inequality measures and the demand for redistribution," IEW - Working Papers iewwp425, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  11. Straub, Stéphane, 2009. "Governance in Water Supply," IDEI Working Papers 544, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  12. Edward L. Glaeser & Bruce Sacerdote, 2007. "Aggregation Reversals and the Social Formation of Beliefs," NBER Working Papers 13031, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Manacorda, Marco & Miguel, Edward & Vigorito, Andrea, 2009. "Government Transfers and Political Support," CEPR Discussion Papers 7163, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  14. Marco Manacorda & Edward Miguel & Andrea Vigorito, 2009. "Government Transfers and Political Support," NBER Working Papers 14702, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Besley, Timothy J. & Ghatak, Maitreesh, 2009. "Property Rights and Economic Development," CEPR Discussion Papers 7243, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  16. Andreas Kuhn, 2009. "Demand for Redistribution, Support for the Welfare State, and Party Identification in Austria," IEW - Working Papers iewwp440, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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